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Aligning Jobs, Skills, and Pay: Detroit and Bilbao as Case Studies

As part of GMF’s Urban and Regional Policy Program’s BUILD 2017 session on Inclusive Economic Development, GMF partnered with the JustJobs Network (JJN) on a detailed, data-driven analysis that explores the nexus of economic diversification, job creation, and job quality in one American city, Detroit, and one European city, Bilbao. This city-level exploration of economic development patterns and labor market trends over the last two decades sheds light on the ways in which cities in the developed world are grappling with, on the one hand, competing in the global economy, while on the other, ensuring inclusivity in the reinvention of metropolitan and regional economies. The issues of inclusivity and equity are central to GMF’s larger Inclusive Economic Development initiative because, as we know, economic growth has not necessarily been equitably distributed among workers. Indeed, the US and UK have been grappling with wage stagnation at the bottom end of the income distribution since the 1980s, and in the EU and the US we are seeing the proliferation of “nonstandard” employment arrangements – part-time work, fixed term contracts, seasonal work, casual work, telework, family work or self-employment. What does equity mean for those in such jobs and what, if anything, can cities do to address this disparity in light of the issues this analysis raises?

The German Marshall Fund collaborated with the JustJobs Network (JJN) to explore the following questions in Bilbao and Detroit at BUILD 2017:

Have these cities managed to diversify their economies, both of which once relied heavily on manufacturing?

To what extent is the emerging economic landscape in Detroit and Bilbao generating more and better jobs?

What roles do characteristics like place, race and education play in shaping the economic opportunities available to city residents?

To address these important research questions, the JJN research team has primarily used a trends analysis approach that involves a selection of indicators that serve as proxy variables for the particular outcomes of analysis – relying on datasets like the American Community Survey (ACS) in Detroit, and Eurostat in Bilbao. The research examines how these indicators have changed over time, and the resulting data visualization tells the story of the evolving economies and labor markets in Bilbao and Detroit as these cities grapple with the challenges of the 21st century.

Our contention is not that Detroit represents all American cities or that Bilbao represents all European cities; nor can a direct comparison between these two places be made, given the different types of data available in the two cities. Nevertheless, the data analysis highlights the challenges cities are faced with when developing equitable economies. We hope that this analysis will prove instructive for how to think holistically about the intersection of jobs, skills and pay, on the one hand. On the other hand, we see the analysis as a first step in a broader discussion about the role of policy in developing and sustaining opportunities for workers in light of labor market changes that have left too many on the periphery of economic growth.